Specialist Lawyer Says It’s Crucial That Deputies And Attorneys Adhere To Guidelines

With Christmas present buying now in full swing, estate planning experts at Irwin Mitchell are reminding individuals in the UK that manage the affairs of those who lack capacity, to ensure they’re fully aware of their responsibilities in this area.

A Lasting Power of Attorney (LPA) is a legal document where someone appoints someone to make decisions on their behalf if they lose capacity.

According to the government, there are over seven million registered LPAs exist in the UK but following this recent rapid growth in popularity, specialist lawyers at Irwin Mitchell are concerned that a large proportion might be unaware of the rules related to gifting.

According to Stewart Stretton-Hill, a senior associate at the national law firm Irwin Mitchell: “Acting as an attorney under a lasting power of attorney (LPA), or a deputy under a deputyship order, comes with significant responsibility so when contemplating gifts, it’s essential to consider your usual powers and duties.

“As an attorney, the Mental Capacity Act provides limited power to make gifts. One of the requirements is the gifts are made on customary occasions and Christmas does count. However, there are other detailed restrictions contained in the act and the power can be further restricted or removed. It is crucial to check the statutory rules and LPA's terms before making any gifts to avoid a nasty surprise from HMRC.”

Stewart Stretton-Hill also highlights the different rules that apply to Deputyship orders – an arrangement granted by the Court of Protection to appoint a deputy when no LPA is in place.

“As a deputy, there’s no automatic power to make gifts. Instead, such powers must be explicitly granted by the court. Therefore, it is vital to consult the deputyship order's wording before acting.”

Irwin Mitchell says all decisions must be made in the best interests of the donor or protected person, and all relevant circumstances, including their past and present wishes, feelings, beliefs, and values should be considered. Where possible, the donor or protected person must be encouraged to participate in the decision-making process.

Stewart adds: “When planning Christmas gifts, consider the estate size, donor’s life expectancy, past gifting habits, potential care costs, and inheritance tax implications. Always act in the donor’s best interests, maintain transparency, and respect their personal preferences.

"It’s crucial for deputies and attorneys to adhere to the legal guidelines and focus on the best interests of the donor. By doing so, it’ll be possible to navigate the festive season with confidence and ensure that decisions are lawful, tax-efficient and appropriate.